This is a cross-post with my contribution at genmobilec.org
This might seem like a stupid question – after all, if you’re hooked on for example Twitter, your service is being run by Twitter. Right?
Wrong. It is in fact likely that the service is running on the benevolence and patience of venture capitalists and other investors who believe that somehow, someday, it will be profitable. Because right now, more often than not, Internet services aren’t profitable business.
Facebook was for long a loss-making enterprise; and they made some significant losses. It is only now that they might be reaching the break-even point. Twitter on the other hand is expecting their first revenue (i.e. any money coming in at all) this quarter. Of course, since most of these companies aren’t public, it’s difficult to know exactly their financials. However, it’s still a safe bet to say most are not even breaking even.
Now, turn the attention to mobile operators, who have been accustomed to very reliable sources of revenue (voice calls). They are now having to venture into uncertain territory in order to continue on the growth path and try to fight against the somewhat inevitable commoditization of their business.
In one sense, operators have had it too easy. SMS has in just 10 years become one of the most incredible money-printing machines any industry has seen. With SMS, the operators enjoy what can only be described as excellent (or absurd, depending on your point of view) margins. And the enabling equipment is a bargain; SMSCs often have RoI times measured in hours or days. Premium SMS has, on the other hand, enabled many successful mobile services despite the operator margins.
But there are limits to growth in SMS and voice calls, so operators are looking to data to capture that growth. It’s easy in theory – just get people to sign up for $10 or $20 or $30 per month data package and voilá, your ARPU is suddenly back on the growth track. In practise, however, it’s not so easy – mainly because people are often difficult in the sense that they need a reason to spend their hard-earned money 
So the operators must be able to give a compelling reason for customers to sign up for a data package.
One interesting thing many operators are doing when searching for that reason, is turning to third party services. What’s more, they are turning to the above mentioned unprofitable Internet and mobile Internet services. Over the past few months, I’ve seen entire advertising campaigns by operators such as Elisa in Finland and Three in Australia that were focused on promoting just one service – Facebook, and mobile access to it. Riding on the popularity of Facebook, the operators want to sell you data plans and even devices.
This presents another interesting aspect; people have come to expect that Internet services are free. People have also come to expect that mobile services are not free, that you have to pay ludicrous amounts for simple things such as ringtones. But what happens when these worlds collide in the form of mobile Internet?
The jury is still out on this one, but really it all boils down to a simple question: what would you be willing to pay for?
Because contrary to what some people like to think, advertising will be unable to support all the services it’s now envisioned to support – at least in its current form. So how about Facebook or Twitter at $5/month? Would you subscribe?
Apologies for the continued absence of photos – my real computer is still(!) on its way in a container, and I’m itching on getting some real photo editing and selection done. It’s highly annoying not having decent equipment to look at the shots. So while we’re still waiting for the photos, here’s a second round of first impressions about Australia. Since I’ve lived in the US and Finland most recently, it’s sort of obvious to compare Australian things to how they are in the US and Finland. Fair? No. Natural? Yes. So here we go:
US vs Australia
- Package sizes – while the GFC has brought back some smaller sizes in the US, everything is still big there. And the same disease of 1kg potato chip bags has been infecting Finland for some time, too. But over here, stuff like that is generally sold in reasonable quantities. Sure there are jumbo-sized this & that available, but it’s sort of refreshing being able to buy a whole bag of potato chips, eat them all in one evening and not feel bloated or gain 1kg from one bag.
- General knowledge aka are people “dumb” here, too? Luckily, no. Not to disparage the Americans – some very smart people there, too – but Australians in general do seem to have a better grasp of the rest of the world than Americans. Take Finland – even though Finland is only half the distance from US than it is from Australia, comparatively few “average” people knew about it in the States. When saying we’re from Finland, comments from Americas were to the tune of, and I quote, “Oh what state is that in?” and “It’s somewhere near Fiji, right?”. Over here, they’re more like “Oh nice place, we went there a couple of years ago!” and “Oh really?! I have good friends in Sweden but never been in Finland.” etc.
- Attitudes towards immigrants seem friendlier here than in the US; and this doesn’t mean that anybody was hostile towards us in the US either, but it just means that Australians are clearly very used to heavy immigration and all kinds of basic things, like getting a local drivers license, are quite easily taken care of.
- Lack of superlatives; with Americans, many things are “awesome!”, “wonderful!” or at least “great!”. Not so much here; things are mostly just “good”. Which is good. Because if you call everything awesome, what do you call something that’s truly awesome?
Finland vs Australia
- Perception of safety is a funny thing. Whether you feel safe may have very little to do with actual safety, but it’s got a strong influence on what you’re likely to do or not do. For example, I was kind of disappointed to notice that streets in Australia are mostly very poorly lit compared to Finland. When it’s dark, it’s dark almost everywhere, hence, going for a run after sunset doesn’t feel like a good idea. It might be, but it doesn’t feel like that.
On the other hand, some small curiosities make Australia feel more safe than Finland; mailboxes are one. Mailboxes in Finland tend to be locked and made of bomb-proof armored steel or something like that. Here, mailboxes are openings or just very flimsily locked. Packages can be left on the doorstep, and apparently nobody steals them – not sure if anyone would steal them in Finland either, but it’s unheard of that the mail guy would leave a package unattended outside your door in Finland. House or unit door locks are a similar story – like in the US, locks here in Australia are the kind that can be picked by an amateur or kicked in. In Finland doors are like mini-safes that can withstand any assault.
- Job titles are for the large parts identical in spelling, but differ in contents. This makes it a bit more challenging in finding the right position content-wise; for example, a business development manager here is typically a salesguy-type of a position, whereas my past years as a BDM were not quite like that.
- People are certainly more friendly and open towards strangers here. Finns come out as positively xenophobic compared to US, let alone Australians. Also, say what you will about the “how are you”s and “fine”s, I like that kind of meaningless small talk. The indifference exhibited in Finland may be more honest, but it certainly doesn’t make your day any happier.
- Potatoes. Oh the irony – the Finnish staple food, potatoes, taste better in Australia than they do in Finland. I couldn’t believe it at first, but it’s now been conclusively and repeatedly proven – potatoes are better here. Why, I have no idea.
